Homework help > You are the tax director for Gunner Corporation. Y... > Published by: Steve 3 years ago
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Subject: Finance
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You are the tax director for Gunner Corporation. You and your team have estimated that Gunner Corporation can take an IRC Section 199 deduction of $300,000 in 2017. In calculating the amount of the deduction, you and your team have been aggressive in the interpretation of the costs that can be included in the deduction calculation. The aggressive items amount to $140,000 of the $300,000 deduction ...[Show More]

3 years ago


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The tax benefit normally offers an opportunity to an organization or even corporation to reduce the amount of tax bill. Tax benefits come in different forms mainly through tax deductions. Other forms could include exclusions or even credit. Tax deduction, on the other hand, aims at reducing the income that can be taxed and is usually brought about by expenses that are incurred during the production of extra income. (Academy) Gunner Corporation tends to increase the tax deductions to ensure that the corporation attains some tax benefits and that can maximize the income. Therefore, several processes are followed to determine whether the tax benefit is rigid to be recorded in the financial statement as discussed below. One key method that could be used to determine whether Gunner should book the tax benefit is through determining the accounting methods used. Various methods are used, and each of the methods got an impact of the final value obtained about cost recovery deductions such as depreciation or even determining the cost of the intangible goods. Thus, Gunner could choose a method that is not an only essay but also one that is transparent and easy to trace or locate errors from. Another process would be through determining the limitations on the deductions. (Australian Taxation Office, 2017) Gunner ought to know what deductions are worth more limitation as compared to others before filling or booking the tax benefits to avoid instances of similar expenditures. Other minor processes could include finding a copy of the last year returns. This will not only help in making a comparison but will also help the Corporation, not to over-dwell on related information especially in situations where the same preparer is involved. Other processes could include ensuring all the relevant receipts are available. This will help in evaluating the figures obtained, and thus it will be easy to determine whether the values match. (Weltman, 2016) This is very vital while determining whether the tax benefits have to be booked. This is because if any errors aren’t traced the same is replicated on the total income to the Gunner corporation. References: Academy. (n.d.). Tax Benefit. Retrieved July 8, 2017, from Investopedia: http://www.investopedia.com/terms/t/tax-benefit.asp Australian Taxation Office. (2017, April 3). Income and deductions for business. Retrieved July 8, 2017, from Australian Government: https://www.ato.gov.au/Business/Income-and-deductions-for-business/ Weltman, B. E. (2016). Ten steps to tax preparation. Investopedia, 1.

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